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Gas stations are among the easiest places for crooks to use stolen credit cards. Pumps are
usually unattended, so all the thieves have to do is swipe your plastic to fill up their tanks.

Now, Visa is rolling out software to detect whether it’s you or someone pretending to be you
filling up on fuel. Roughly 25,000 gas stations have already signed on, with Chevron, an early test
case, reporting a 23 percent drop in fraud at the pump.

So, how does it work?

The software analyzes 500 pieces of data, including location and past transactions, in less than
a second. Based on that data, the software creates a risk score on a scale from zero to 99. The
higher the score, the higher the risk that the card in use is stolen. Each gas station gets to set
a risk threshold, say 50 on that zero-to-99 scale. If your card generates a risk score that exceeds
the threshold, a message will flash at the pump for you to see the attendant inside the
station.

“If a fraudster gets that message, they’re going to drive away. The genuine consumer is going to
go to the attendant to finish the transaction,” said Mark Nelsen, Visa’s vice president of risk
products and business intelligence.

The Visa Transaction Advisor, as the software is called, pulls on data the company has collected
on cardholders and existing fraud-detection technology — the kind already in use to monitor
suspicious activity on credit and debit cards. What makes this software different is the
involvement of merchants, who can ask for additional verification once the customer receives the
alert to see the attendant.

It is difficult to pinpoint the amount of payment fraud that occurs at gas stations, though some
analysts say it’s four times the average for other forms of retail. Researchers at Nilson Reports
say global payment fraud has crept up in recent years, though rates remain at historic lows. Six
cents of every $100 in transactions, they say, is tied to fraud.

“Gas stations are a challenging environment because of the self-service,” Nelsen said. “It’s
also a place where criminals can test out lost, stolen and counterfeited cards to see if they’re
working, and then they can go use them other places.”

He said Visa saw an opportunity to provide gas stations added fraud protection since it will
take those merchants longer to upgrade their pumps to accept EMV smart chip cards — plastic cards
outfitted with a microprocessor that stores and transmits encrypted data that make it difficult to
counterfeit. Visa and MasterCard have given all players in the payment system — the banks that
issue the cards, merchants that accept them and financial firms that manage the transactions —
until October 2015 to upgrade to the technology or bear the cost of fraud. But gas stations have
been given until 2017 because it will cost them more to replace card readers embedded in the pumps
with devices capable of accepting the chip cards.